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Saturday, October 26, 2013

I had recommended a property investment in my last blog and
quite a few people had reached out to me and few did go ahead with the
investment. Many did not as they could not fathom the calculations on how the
ROI is calculated.

So I have created an excel sheet that is formula driven –you can
download it from drop box url here.

You are buying a 2000 sq ft
flat at a cost of Rs 5000 per sq ft plus one car park (at Rs 3 lacs). So
you commit Rs 103 lacs for the flat.

The flat is ready in 4
years – i.e. Quarter 4 of 2017

You pay 20% upfront right
away (i.e.20.6 lacs Nov 2013) and take a home loan for the remaining 80% amount
(Rs 82.4 lacs) that is paid over 12 equal instalments by the bank

The home loan rate is
10.5% and you pay the pre emi for the loan for the next 4 years every
month. The pre emi that you have paid over four years totals to Rs 18 lacs.

You sell the flat at Rs. 9000
a sq ft – and get Rs 4 lacs for the car park – you get Rs 184 lacs by
selling it in March 2018 (you may ask why Rs 9000 - well that is my forecast of the price of the property after 4 years)

You have paid Rs 20.6 lacs now and then paid a monthly pre
emi totalling to Rs 18 lacs – so your total outflow has been 38 lacs.

By selling you get Rs 184 lacs – you repay the loan of Rs. 82.4
lacs – you are still left with Rs. 101.6 lacs

Remove the amount that you have invested i.e. Rs 38 lacs –
you will be still be left with a profit of Rs. 63 lacs ( let us leave the change out of our discussion)

So you get Rs 63 lacs profit from this transaction -

Will you be able to save Rs 63 lacs over four years through your salary? Most probably NO

This is one smart way to get rich and retire early

Even though this example is for a three bedroom flat and Rs 100 lacs investment, you can start with Rs. 60 lacs for a two bedroom flat in Prestige Lakeside - and you can go up to a few crores - the mathematics will not change.

If you have any questions - please do come back to me.

If you want to go with the investment - please reach out to my ex student Varun - his number is 99459 50109 - he works for a good real estate advisory and will help you with all the documentation.

I also would like to have comments from my readers and people who have already invested in this property

Friday, October 11, 2013

One of the feedback that I received after the last two posts
is that – it is good to know what happened – but tell me where I can invest now
and make similar returns.

So I am sharing one good property idea where you can make
returns similar to the one I shared recently.

Prestige Shantiniketan is a well know property in Bangalore.
This is the property where my friend made 65 lacs out of an investment of 35 lacs
over 7 years (please see my blog dated Sept 21st 2013).

Now Prestige builders are coming up with a bigger property
than Shantiniketan. It is called Prestige Lakeside Habitat. It is in a good
location off Varthur lake in Whitefield area – the total land area is around 120
acres. They are planning 28 towers with
a total of 3500 apartments – there will 2 bhk, 2.5 bhk, 3 bhk and 3.5 bhk apartment
options. Then there are 350 villas.The apartments
would cost between 60 lacs to 150 lacs (4300 – 5000 per sq ft) and the villas
around 2.5 cr to 4 cr (7500 -8000 psft).

The project will take 5 years for completion – so it will be
ready by 2018 end.

The builder is likely to launch the project on Oct 20th – if you
want to book a flat, you need to pay Rs 5L while booking and if you want to
book a villa – you need to pay Rs 10 lacs.

I expect the property value to double by the time it gets ready in 2018. So if you have invested 60 lacs (paid over 3-4 years), you can take a profit of Rs 60 lacs by selling the same flat in 2018. This is my forecast – the location, the builder credentials, the size of the property is what makes me so sure.

So depending on your ability to invest next week and also
your ability to arrange funds in the 3-4 years, I recommend you to book a flat or villa.

If you want more information on this – please do reach back to me at rajasekharan.sg@gmail.com
or Varun Rajaratnam at varun.rajaratnam@clovermark.in (ph - 9945950109)– Varun is my ex-student and
works for Four Clover in Bangalore
and I trust him with good honest advice in real estate.